On May 15, 2025, the U.S. Departments of Labor ("DOL"), Health and Human Services ("HHS"), and Treasury ("Departments") issued a Statement announcing that they will not enforce portions of a final rule relating to the Mental Health Parity and Addiction Equity Act ("MHPAEA"), which was adopted in 2024. This non-enforcement policy will likely be well received by plan sponsors, employers and health plans, many of whom have been critical of additional reporting obligations and unclear guidance from the Departments. Perhaps more significantly, the statement provides that the Departments will reconsider broader issues related to mental health parity, including the Departments' approach to enforcement of MHPAEA as amended by legislation passed in 2021. The history below provides more context on this recent development.
History of the Mental Health Parity and Addiction Equity Act
Congress adopts the Mental Health Parity Act (1996) and Mental Health Parity and Addiction Equity Act (2008)
Congress first tackled the issue of parity for Mental Health benefits in 1996 with the Mental Health Parity Act ("MHPA"). The MHPA imposed a basic parity requirement with respect to terms in a health plan relating to Mental Health ("MH") benefits and Medical/Surgical ("M/S") benefits. In particular, it focused on parity with respect to plan terms that adopted dollar amount limits on benefits, including aggregate lifetime limits and annual limits.
In 2008, Congress adopted the Mental Health Parity and Addiction Equity Act ("MHPAEA"), which added a requirement for parity between Mental Health and Substance Use Disorder ("MH/SUD") benefits and M/S benefits with respect to "financial requirements"—i.e., cost-sharing terms like deductibles, copayments, coinsurance, and out-of-pocket expenses—and "treatment limitations"—e.g., limits on the frequency of treatment, number of visits, days of coverage, or other similar limits on the scope or duration of treatment. MHPAEA precludes financial requirements or treatment limitations on MH/SUD benefits that do not apply to M/S benefits. Financial requirements or treatment limitations that apply to MH/SUD benefits must generally be "no more restrictive than the predominant" financial requirements or treatment limitations that apply to M/S benefits.
HHS, Treasury, and DOL Adopt Implementing Regulations
MHPAEA is administered by three executive departments: HHS, Treasury, and DOL. These Departments adopted Joint Interim Final Rules in 2010, and Final Rules in 2013. The 2010 Interim Rules created a distinction between quantitative treatment limitations ("QTLs")—those that are "expressed numerically," such as limits on the number of doctor visits—and nonquantitative treatment limitations ("NQTLs"), which include other limitations such as requirements for a referral from a primary care provider before seeing a specialist. They also established six benefits classifications, and provided that parity requirements for treatment limitations must be applied on a classification-by-classification basis.
The 2013 Final Rules adopted the interim rules with some modifications. Because QTLs are expressed numerically, the 2013 Rules provide for parity to be determined mathematically. NQTLs, on the other hand, are subject to different parity standards. In particular, plans must not adopt any NQTLs that apply to MH/SUD benefits in a given classification "unless, under the terms of the plan as written and in operation, any processes, strategies, evidentiary standards, or other factors used in applying the [NQTL] to [MH/SUD] benefits in the [given benefits classification] are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, or other factors used in applying the [NQTL] to [M/S] benefits in the classification." (emphasis added).
Congress Amends the MHPAEA in the Consolidated Appropriations Act 2021
Congress amended MHPAEA as part of the Consolidated Appropriations Act, 2021 (the "CAA"). The CAA codified the 2013 Rules' criteria for NQTL parity and imposed a statutory requirement that plans "perform and document . . . and make available to the [Departments] . . . comparative analyses demonstrating that the processes, strategies, evidentiary standards, and other factors used to apply the NQTLs to [MH/SUD] benefits, as written and in operation, are comparable to, and are applied no more stringently than, the processes, strategies, evidentiary standards, and other factors used to apply the NQTLs to [M/S] benefits in [a given] benefits classification." Plans are required to keep their comparative analyses up-to-date, and must provide them to the Departments on request. The CAA also laid out specific requirements regarding information plans must provide to the Departments alongside their comparative analyses, and required plans to promptly notify enrollees if, after review of their comparative analyses, any of the Departments make a final determination of noncompliance.
In addition, the CAA requires the Departments, after review of the comparative analyses, to share information on findings of compliance and noncompliance with the State where the plan is located. The Departments must also submit annual reports to Congress identifying any plans determined to be noncompliant and specifying what they must do to achieve compliance.
The Departments Adopt the 2024 Final Rule
On September 23, 2024, the Departments amended the 2013 Rules and added new regulations in the 2024 Final Rule. In particular, the 2024 Final Rule added a requirement relating to "meaningful benefits," made significant changes to requirements relating to NQTLs, and also made changes to how plans must perform and document comparative analyses.
With respect to the "meaningful benefits" requirement, the 2024 Final Rule provides that "[i]f a plan provides any benefits for a [MH condition/SUD] in any classification of benefits . . . , it must provide meaningful benefits for that [condition/disorder] in every classification in which [M/S] benefits are provided." Under the 2024 Final Rule, a plan does not provide "meaningful benefits" unless it provides benefits for a "core treatment"—i.e., a "standard treatment or course of treatment, therapy, service, or intervention indicated by generally recognized independent standards of current medical practice."
With respect to NQTLs, the 2024 Final Rule established certain requirements that plans must meet in order to demonstrate that an NQTL applied to MH/SUD benefits is "no more restrictive" than the NQTL applied to M/S benefits in the same classification. First, plans must satisfy "design and application requirements," meaning they must not design their NQTLs using factors or evidentiary standards that discriminate against MH/SUD benefits as compared to M/S benefits.
Second, plans must gather and evaluate relevant data to ensure access to MH/SUD benefits is not unduly restricted when compared with M/S benefits. Plans must document and address "material differences in access," as such differences may give rise to a presumption of noncompliance. If plans do not have relevant data, they must explain the gap in their comparative analysis and outline when and how that data will be collected and analyzed.
With respect to comparative analyses, the 2024 Final Rule expands somewhat on the requirements set forth in the CAA. In particular, as noted above, plans must identify and document relevant data that was collected, how it was evaluated, and the outcomes on access; and the comparative analysis must address or justify any observed material differences in access. The 2024 Final Rule also requires plan fiduciaries to certify that they have carefully selected qualified service providers to conduct and document the comparative analysis and have satisfied a duty to monitor the service providers.
The Departments Announce a Non-Enforcement Policy
On January 17, 2025, the ERISA Industry Committee ("ERIC")—a non-profit trade organization that advocates on behalf of large employers—filed a complaint challenging several aspects of the 2024 Final Rule. In particular, ERIC argued that the new requirements relating to meaningful benefits, material differences in access, comparative analyses, and fiduciary certification exceeded the Departments' statutory authority, violated the Administrative Procedures Act, and were otherwise unlawful. ERIC also alleged that the Departments' adoption of January 1, 2025 as the applicability date was arbitrary and capricious, and held regulated parties to an impossible standard. Additionally, the requirement to address "material differences in access" goes beyond the statutory requirement, which prohibits disparate treatment—not disparate impact.
Rather than respond to ERIC's complaint, the Departments asked the court to hold the case in abeyance, and then issued a public statement indicating that the Departments will not enforce "those portions of the 2024 Final Rule that are new in relation to the 2013 final rule." According to the May 15, 2025 Statement, this decision not to defend the 2024 Final Rule in court was influenced by Executive Order 14219, which "directs federal agencies to review regulations to identify those that may undermine the national interest, including by imposing undue burdens on small businesses or significant costs upon private parties that are not outweighed by public benefits." In light of both the litigation and the Executive Order, the Departments intend to reconsider—and potentially rescind or modify—the 2024 Final Rule. The Statement notes that statutory obligations—including those established by the CAA—remain in effect, and encourages plans to refer to the 2013 Final Rule and other subregulatory guidance, including published FAQs addressing the impact of the CAA.
Effect of the Non-Enforcement Policy on Regulated Parties
The Nonenforcement Policy is a welcome development for health plans and issuers of health insurance. The 2013 Rules and the CAA already imposed obligations and the new requirements of the 2024 Final Rule—particularly the requirement to provide "meaningful benefits," and to address "material differences in access"—were viewed by many as practically impossible to achieve. According to ERIC's complaint, while employers wholeheartedly endorse the noble goals of ensuring parity and increasing access to MH/SUD benefits, the 2024 Final Rule imposes requirements that are, in their view, ambiguous, burdensome, and unworkable and actually discouraged employers from offering MH/SUD benefits at all. Plan sponsors and health plans will be actively watching for further guidance from the Departments as to both the reconsideration of the 2024 Final Rule, as well as the Departments' approach to enforcement of MHPAEA as amended by the 2021 legislation.
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